Accession Number:

ADA050146

Title:

A Dynamic Stochastic Model of Corporate Behavior Over the Business Cycle With a Special Application to the Major U.S. Military Airframe Builders.

Descriptive Note:

Doctoral thesis,

Corporate Author:

NAVAL POSTGRADUATE SCHOOL MONTEREY CALIF

Personal Author(s):

Report Date:

1977-09-01

Pagination or Media Count:

1283.0

Abstract:

This thesis contains a formulation of a dynamic stochastic model of corporate behavior over the business cycle and applies the basic model to firms in the U.S. airframe industry. The literature dealing with the theory of the firm is surveyed and a taxonomy is developed within which the major contributions to the literature are appraised. The basic model is formulated as an optimal control problem. The model is used to study the behavior of the firm over the business cycle and to suggest a possible reconciliation of the traditional and managerial theories of the firm. Financial considerations are incorporated into the model and the relationship between the firms optimal operating decisions and its optimal financial decisions is examined. A model of a representative airframe builder is formulated as a stochastic optimal control problem and is used to study the impact of the governments progress payments policy and the likely impact of making interest expense an allowable cost under government contracts.

Subject Categories:

  • Aircraft
  • Economics and Cost Analysis

Distribution Statement:

APPROVED FOR PUBLIC RELEASE